The Non-Farm Payrolls is one of the most critical monthly economic indicators. This major report shows how many new jobs were created within US companies.
The results are divided into industry groups, and as the name suggests, it excludes the agricultural sector.
What is the NFP?
When does it take place?
It is released on the first Friday of each month, reporting on the figures of the previous month.
Traditionally, it has a powerful influence on the US dollar and can form long-term market trends.
Traditionally, it has a powerful influence on the US dollar and can form long-term market trends.
How does NFP affect the market?
Higher employment rates may indicate the expansion of national companies, potentially impacting the stock market. Moreover, an increase in potential consumer spending would lead to economic growth. NFP also reports about the working time spent and the average wage rate, the growth of which can lead to higher interest rates. If data is better than the forecast, it often pushes the EURUSD chart down. CFDs often most impacted by the NFP are FX Pairs with US Dollar.
Be prepared for increased volatility, especially in the moments before and after the publication.
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Stay up to date with the latest news releases with the FxPro Economic calendar available in our app or website. You can find a detailed description of each event, along with the impact, previous and forecasted data, and see the actual figures update in real-time.
If the indicator value in the calendar turns out to be better than the forecast, investors will begin to open more trades to buy the national currency.
If the data is worse than the expectations, they will generally sell.
The greater the difference between the forecast and the actual value, the more the market will react. On the other hand, if the value of the indicator corresponds with the forecast, the market reaction is likely to be less significant.
For example, if the employment rate was previously expected to be 500k but then unexpectedly fell to 220k, the value of the dollar would likely fall as a result of such negative financial news.
However, it is important to remember that trading on news involves significant risk of loss.
Sometimes the foreign exchange market does not react to the news in the way that most traders expect. An example would be if the unemployment rate increased, but at the same time, the number of new jobs in the US private sector (NFP) also increased.
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